According to China publication Apple Times, the Chinese government has installed surveillance devices on up to 20,000 cars with dual China/Hong Kong plates, claiming the tags are just for inspection. However, they have the capability to pickup and transmit conversations.

Epoch Times says the devices, which were first installed in cars back in 2007, are roughly the size of a PDA, and according to University of Hong Kong professor Zheng Liming, the tracker can transmit signals up to 20km. That range means that drivers can be tracked in two regions of Hong Kong.

Much cheaper chips can be used to check inspection status for simple border crossings, Zhang said, "But this device uses chips commonly found in Bluetooth and voice recording devices, designed for receiving voice transmission."

He thus thought it "very likely" that they were being used for surveillance.

Suspicion first arose when Smugglers noticed their trucks and cars—full of illicit goods—were being picked off by Chinese authorities with extreme precision. Representatives from the Shenzhen Bureau of Quarantine and Investigation have denied all allegations of citizen spying. [Apple Daily and Epoch Times via Geekosystem]